According to the Chairman of India’s Engineering Export Promotion Council (EEPC), there is a lack of understanding among banks on the International Trade Settlement process in rupees (INR), and those having exposure to the United States are scared of sanctions. The International Trade Settlement mechanism in rupee was established by the Reserve Bank of India (RBI) at the beginning of last year with the intention of enabling commerce with nations that are subject to sanctions, such as Russia.
The rupee trade settlement process has not yet operated without a hitch. Sanctions are a concern for banks, particularly those with offices in or direct business relationships with the United States, according to Arun Kumar Garodia, chairman of EEPC, a group funded by the Union Ministry of Commerce, who spoke with The Hindu in an interview.
Because of this, they are not issuing He noted that the export transaction must be completed with e-Bank Realisation Certificates (BRC).
Mr. Garodia stated that an agreement between the banks and the RBI is required to ensure the smooth operation of the rupee trade mechanism. He added that it was crucial, particularly in light of the fact that engineering goods shipments to the CIS region fell by 34% during the current fiscal year due to the Russia-Ukraine issue. Russia is the biggest market “Russia is the region’s largest market. We are confident that trade will increase until rupee settlement is seamless.
In addition, we have urged the Indian government to implement the rupee settlement system with other nations, like Bangladesh, Sri Lanka, and others, that are subject to U.S. sanctions or have problems. about the payment of foreign exchange in hard currency, he stated.
